Special Issue – DFMC iewPoint September MMXVII · PDF fileiewPoint September MMXVII Inside This Issue Dear Partners in Service to the Church: Welcome to Baltimore and the 2017 DFMC!

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Special Issue – DFMC Annual Conference September MMXVIIV iewPoint

Inside This Issue

Dear Partners in Service to the Church:

Welcome to Baltimore and the 2017 DFMC! I am excited to be here along with more than 50 of my Gallagher colleagues in our Religious Practice from around the world…grateful to be here, in fact.

To those of you new to DFMC, we think you will find this gathering very worthwhile and insightful. We also ask that you give us your reactions and first impressions, as some of us have been attending for a very long time — personally I think I am at around 21 years, given my 16 years at Gallagher and 5 years prior at Munich Re. Pat Markey and the Board of Directors at DFMC have done a great job of re-thinking the opportunity such a venue as this presents for the greater service community — learning, networking and doing!

For those of you who have been attending for years, we all can ask the question of what we can bring to this meeting to make a difference — perhaps it is an attitude of being open to new ideas or starting a conversation with someone you don’t know. Getting out of your comfort zone and actually meeting those who think differently may be the greatest gift this meeting presents. After all, our Pope is exhorting us as well “Pastoral ministry in a missionary key seeks to abandon the complacent attitude that says: ‘We have always done it this way.’ I invite everyone to be bold and creative in this task of rethinking the goals, structures, style and methods of evangelization in their respective communities.”

We have some great connections in store — our Sunday Golf Outing, our Tuesday evening Gala Dinner, where we will recognize our J.P. Gallagher Audax Award recipient and our networking breakfast for our service provider partners on Wednesday morning and our internal Diocesan Team meeting thereafter.

Our commitment to the diocesan community is deep and wide — local and global. And it all begins with our leaders, many of whom will be at our Gala dinner Tuesday evening, beginning with Pat Gallagher, our Chairman, President and CEO. And I must say he beats me by many years in terms of the number of DFMCs he has participated in — that speaks volumes!

Peter Persuitti leads Gallagher’s Religious Practice.

Welcome to DFMC 2017 !

Schedule of Events ...............................1

The Gallagher Team @ DFMC 2017 .....2

Ethisphere ............................................3

Remembering 2016 and the J.P. Gallagher Audax Award going to the Rev. Greg Boyle, SJ — Founder, Homeboy Industries, Los Angeles, CA! ........................................4

Going Beyond .......................................6

We love having you back to DFMC each year! ............................................7

The IRC story. Are we truly ever ready? .8

Gallagher “Alumni” ...............................9

Reta, a Catholic Healthcare Trust ........12

A Reta Trust reference pricing case study — increasing the purchase of lowest cost medications .....................13

Convocation — a Tradition ..................14

Moving forward under PPACA ..............18

2017 Human Capital Insight Report ....20

Resilience in the face of increasing cyber threats ......................................21

Shedding light on your data.................22

T2 — Exponential insight and food for thought ..........................................24

CORE360™ — optimizing your cost of risk to help fulfill your mission ............27

How lucky I am to work with great nonprofit leaders! ...............................28

Claims and nonprofits — embracing the opportunity ...................................29

Why nonprofits should be encouraged for their investments...........................30

Business continuity and resilience ......31

The importance and management of student and athletic accident coverage for diocesan schools and parishes ......32

Common Ground — 16 years and thriving ........................................33

BPIC Key Facts —2017 ......................39

The Gallagher Post ..............................40

Actively Managing Risk for Long-Term Sustainability—Looking Beyond Insurance Limits and Premiums .........41

EventUs! ............................................43

A publication of Arthur J. Gallagher & Co. | Global Religious Practice

Venue of Gallagher’s 2017 Gala

Dinner!

Peter Persuitti

SCHEDULE OF EVENTSWe hope to see you at DFMC 2017!

SUNDAY, SEPTEMBER 2411:00 a.m. Fox Hollow Golf Course

(Kevin Barry, Chair)

MONDAY, SEPTEMBER 259 a.m. – 5 p.m. Gallagher Gold Exhibit at

DFMC Booth #402

Evening Dinners Hosted by Gallagher Regional Teams

TUESDAY, SEPTEMBER 268 a.m. – 3 p.m. Gallagher Gold Exhibit at

DFMC Booth #402

6:15 – 10 p.m. Gallagher DFMC Gala Dinner at UMBC Columbus Center

J.P. Gallagher Audax Award

WEDNESDAY, SEPTEMBER 278 – 8:45 a.m. Ministry Partners’

Networking Breakfast Waterview Ballroom

8:45 – 11:30 a.m. Gallagher’s Religious Practice Meeting Waterview Ballroom

DFMC 2017

2 Gallagher Viewpoint | September 2017 | DFMC Conference

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The Gallagher Team @ DFMC 2017I was thinking about this event and the way we as a company and as a Religious Practice marshal our team and our resources for the benefit of the temporal administration of the Church. Below is a table of the attendees from our Religious Practice across all divisions of Gallagher worldwide. Please feel free to connect!

Peter A. Persuitti, Managing Director

NAME POSITION EMAIL1. Tony Abella Area Senior Vice-President [email protected]. Kevin Barry Area Vice President [email protected]. Steve Boyer Vice President — Property Practice [email protected]. Wally Bryce Director of Business Development [email protected]. Phil Bushnell Managing Director Religious Practice [email protected]. Thomas Evans Account Executive [email protected]. Pat Gallagher Chairman, President and Chief Executive Officer [email protected]. Laurie Gregorio Senior Vice President [email protected]. Rani Heck Senior Account Manager [email protected]

10. Scott Hudson President & CEO [email protected]. Ampy Jimenez Client Service Executive [email protected]. John Jurik Area Executive Vice President [email protected]. Mike Levin Area Senior Vice President [email protected]. Bob Lombard Area President [email protected]. Melinda Maillet Account Executive [email protected]. James Martinez Client Consultant [email protected]. Shawn McCall Senior Vice President [email protected]. Tony McLaughlin Vice President, Religious & Nonprofit Practice [email protected]. Andrew Moss Account Executive [email protected]. John Murphy Senior Vice President — II & FS [email protected]. Saluna Neupane Account Executive [email protected]. Mark Noffert Area Executive Vice President [email protected]. Therese O'Brien Account Executive [email protected]. Craig Parres Area Chief Operating Officer [email protected]. John Passantino Vice President [email protected]. Kathy Passantino Senior Vice President [email protected]. Maria Perez Area Senior Vice President [email protected]. Peter Persuitti Managing Director, Religious Practice [email protected]. Nick Profancik Benefits Consultant [email protected]. Bill Rafferty Senior Vice President [email protected]. Jeff Reagan Area Senior Vice President [email protected]. Carolyn Reynolds Account Executive [email protected]. Marty Roche Area Assistant Vice President [email protected]. Thyra Romito Executive Assistant [email protected]. Sammy Ruggiero Associate, Client Development [email protected]. Kristy Sands Assistant Vice President [email protected]. Jackie Schott Area Executive Vice President [email protected]. Sharon Size Captive Director [email protected]. Robert Sloan Regional Vice President [email protected]. Christopher Spala Senior Account Manager [email protected]. Dena Stewart Area Vice President [email protected]. Charlane Thompson Underwriting Partner [email protected]. Ken Urrutia Vice President [email protected]. Janet Wagner-Wilhelms Conference Coordinator [email protected]. Dave Williams Area Vice President [email protected]. Gary Wood Senior Account Executive [email protected]. Barbara Yoshimura Area Senior Vice President [email protected]. Mike Wroblewski Consultant, Religious Practice [email protected]

Gallagher Viewpoint | September 2017 | DFMC Conference 3

Gallagher Named One of the World’s Most Ethical Companies for 2017

“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC. Arthur J. Gallagher & Co. named one of the World’s Most Ethical Companies® for 2017. Ethisphere Institute, March 2017.

Expertise. Service. Trust. Value. Visit us at www.ajg.com

Who says integrity is intangible?Arthur J. Gallagher & Co. is honored to be part of this elite group for the 6th consecutive year.

EthispherePerhaps you have noticed how we have proudly shared our global recognition for now six years in a row as the only insurance services firm recipient of the Ethisphere Award, for the sixth consecutive year in 2017. What does this exactly mean?

To give you context, we must introduce the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust, and business success. The institute has a deep expertise in measuring and defining core ethics standards using data-driven insights that help companies enhance corporate character and believes integrity and transparency impact the public trust and the bottom line of any organization. Such a distinction honors superior achievement in transparency, integrity, ethics and compliance, based on the institute’s proprietary rating system, the corporate Ethics Quotient™.

Our Chief Ethics Office, Tom Tropp, who also has a Master’s in Divinity from the University of Chicago, leads our efforts to live

out our “Gallagher Way” culture, which is the foundation of our pursuit of excellence and collective efforts to exceed corporate ethics standards.

“Over the last eleven years we have seen the shift in societal expectations, constant redefinition of laws and regulations and the geopolitical climate. We have also seen how companies honored as the World’s Most Ethical respond to these challenges. They invest in their local communities around the world, embrace strategies of diversity and inclusion, and focus on long term-ism as a sustainable business advantage,” explained Ethisphere’s Chief Executive Officer, Timothy Erblich. “Congratulations to everyone at Arthur J. Gallagher & Co. for being recognized as a World’s Most Ethical Company.”

There are 124 honorees in 2017, spanning five continents, 19 countries and 52 industry sectors. Ethisphere celebrated 11 years of operation in January 2017.

DFMC 2017


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Remembering 2016 and the J.P. Gallagher Audax Award going to the Rev. Greg Boyle, SJ — Founder, Homeboy Industries, Los Angeles, CA! The J.P. Gallagher Audax Award is given annually to highly esteemed and accomplished individuals working in the Church in notable ministries. The award honors the memory of Gallagher’s J.P. Gallagher (Pat’s father). J.P.’s collaborative spirit in working closely with the Church in insurance and risk management in the 70s, 80s and 90s left an indelible mark with innovative protected self-insurance strategies for reclaiming dollars for ministry. Audax is Latin for “bold,” and the intent of the award is to honor and recognize bold and courageous men and women who through their ministry have made a discernible difference in the lives of others and the life of the Church.

In the case of 2016 we were gathered at the San Diego Zoo for an “outdoor experience…” and found cover in the Zoo store, where we honored a Jesuit, a brave leader in inner city Los Angeles. Working with parish community members in 1988, Father Greg began to develop positive opportunities for gang members and their families. They established an alternative school, a day care center, and they developed legitimate employment opportunities. It was called “Jobs for the Future.” After the Los Angeles Riots of 1992 Jobs for the Future launched its first social enterprise business, Homeboy Bakery. The success of the bakery led to other social enterprise businesses, including Homegirl Café, a restaurant on the site of their main location, a chips, salsa and guacamole product marketed in a major grocery chain, a silkscreen business, and a retail store.

Additionally, they sell goods at farmers’ markets in the Los Angeles area. Today, Homeboy Industries employs more than 200 former gang members in their various businesses. They have an ongoing educational program for those involved with them and they have a Charter School, a full staff of counselors, both family and legal counseling. They have a significant tattoo removal program with volunteer doctors. Many other programs are being designed and they are looking for more social enterprise businesses to expand their programs within the community.

Father Greg, with his gang moniker “G Dog,” is also an award-winning author of the book, “Tattoos on the Heart: The Power of Boundless Compassion.” The book was named one of the best books by Publishers Weekly and it received the PEN Center USA 2011 award as Best Creative Non-Fiction. Father Boyle is the subject of the documentary film G Dog. Among his many awards he has received the California Peace Prize and he has been inducted into the California Hall of Fame. In 2014 the White House named him Champion of Change and he received the Humanitarian of the Year Award by the James Beard Foundation.

Peter Persuitti, Father Greg Boyle, Pat Gallagher at San Diego Zoo

Special thanks to Catholic Management Services (CMS) for hosting the wine tasting experience and for donating

the wine we will be enjoying throughout the Gallagher Grande Passegiata.


We will be honoring our 2017 Audax recipient at the Gallagher Gala Dinner on

Tuesday, September 26.

J.P. GALLAGHER AUDAX AWARD RECIPIENTS

2017 | Baltimore MDTo be announced September 26 at our Gallagher Gala Dinner

2016 | San DiegoGregory J. Boyle S. J. Homeboy Industries

2015 | AtlantaArchdiocese of Chicago 50 years of partnership

2014 | ChicagoBishop Melczek Diocese of Gary

2013 | BostonBishop Paprocki

Diocese of Springfield in Illinois

2012 | HoustonBishop Kmiec

Diocese of Buffalo

2011 | MinneapolisBishop Kicanas Diocese of Tucson

2010 | New OrleansSister Monica Kostielney SM Michigan Catholic Conference

2009 | ChicagoRev. Paul Stein

Archdiocese of Chicago

2008 | MiamiMonsignor Kohls

Diocese of St. Augustine

2007 | PhiladelphiaBishop Trautman

Diocese of Erie

Peter Persuitti and Bishop Paprocki

Pat Gallagher, Bishop Kicanas and Peter Persuitti

Bishop Troutman, Pat Gallagher, Sister Monica Kostielney, SM and Peter Persuitti

DFMC 2017


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Going Beyond Tony McLaughlin

Tony McLaughlin is Vice President and Leader of the Religious & Nonprofit Practice at Gallagher Bassett, a division of Arthur J. Gallagher & Co. He and his family reside in Omaha, Nebraska. Tony can be reached at [email protected].

At times, the complicated process that is claims administration can become routine or a matter of just doing what we have always done or following the guidelines in nature. In an effort to guard our clients’ assets as trusted stewards of their claims and risk management programs, we appreciate the importance of putting as many dollars back into their ministries as possible. In many cases, a dollar saved on behalf of a client is also a dollar returned to their ministry.

The Gallagher Bassett Religious and Nonprofit Practice has created specific training modules for our resolution managers (adjusters) that emphasize the importance of communication, equitable resolution, and advocating beyond the typical claim handling process. One simple way to place our resolution managers in the right frame of mind with each claim is instructing them to act as if they were helping a family member through a financial or physical loss. We understand that taking people by the hand and guiding them toward the best possible outcome is the best way to truly bring value to providing complete resolution for any type of claim.

As more and more informed clients see the opportunity of retaining risk and move toward self-insured retentions (SIRs), our ability to return dollars to mission is both successful and measurable. Even in cases where we are administering a program with dollar one coverage provided by an insurance company, we remain focused on prompt and equitable resolution of the claim—despite the fact that

any direct savings realized on behalf of the client still goes to the insurance company. In these cases, when reduced claims experience is realized by the client, the direct return of dollars going back to that client does not occur.

Gallagher Bassett’s Religious and Nonprofit Practice was recently successful in assisting a client who experienced a similar situation. The client maintained relatively modest deductibles, but their insurance company would not allow Gallagher Bassett to be the primary claim handler. Out-of-the-box thinking on behalf of our team resulted in Gallagher Bassett assuming the role as the client’s claim advocate.

Our understanding and appreciation of the importance of guiding clients through the claims process allowed us to become a valuable resource to this client, and we were able to assist with expediting the claim resolution cycle. Our role included communication with both the client and the insurance company to create and manage reasonable expectations and to facilitate necessary communication. In this case, stepping outside of our customary role enabled us to bring value to the client and confidently go beyond their expectations.

In a world where more and more procedures are being moved to automation or classified as touchless claims processes, Gallagher Bassett’s Religious and Nonprofit Practice still believes in the value that personal touch brings to the claims administration process.

Gallagher Bassett places a significant ongoing investment in technology to provide resolution managers with the tools they need to increase the value and likelihood of a positive resolution to the claims process. Yet, combining technology with a personal level of service brings the best of both worlds to our clients—providing equitable resolution and advocating beyond the typical claim handling process.

Church Mutual Insurance Company (CMIC) continues to provide annual appraisal contributions of $2,500 to each Diocese that CMIC insures for their Property.


We love having you back to DFMC each year!A conversation between Peter Persuitti and Jack Campbell

Jack Campbell, Jim Gault, Patrick J. Gallagher and Jeri Campbell

What roles did you have in the Gallagher Group of Companies? I was hired by Sterling Bassett very early on in what we called the “Bishop Plan.” I was to focus on the Diocese of Rockford, Illinois, which was to start the program around Thanksgiving that year. After servicing the Diocese, I opened the office in Lansing, Michigan, and we handled all five Dioceses of Michigan. I became the District Manager while there and went to New York and the Archdiocese of New York. Sterling became ill and decided to retire and JPG and Sterling asked me to return to Chicago as President of G.B.I., served as President and then Chairman shortly before I retired.

What makes the diocesan sector so special for you two? The Diocesan program was truly special not just for my career but it was truly a wonderful program for The Catholic Church. It saved the Church millions of dollars and allowed the Church to structure the program to cover many losses which were not covered under standard insurance policies. I will always be proud to have been a part of that from the beginning. Geri and all the wives and families all became a part of the program as we believed in what we’re doing and as Sterling once said “We don’t just employ an individual but the entire family and we must know them and make the family a part of the process.”

How many years have you been coming to Gallagher’s Gala Dinner at DFMC? I believe Geri and I attended all but three or four of the Gallagher dinners. In the early years we didn’t have a formal dinner so JPG, Jim Enright and I would slip a dinner invitation under the room doors of the attendees and invite them to a dinner hosted by Gallagher. No one ever objected so this was how the Gallagher dinner began until it was formally approved by the DFMC.

How has DFMC or the experience changed over the years for you both? The size of the conference has just grown tremendously. Geri and I marvel at its size and how professional it is compared to the early years.

What insights would you offer to those CFOs and other diocesan leaders that do attend DFMC in terms of seeking out service partners? I hesitate to answer this because the attendees are all professionals and dedicated to their profession. I would suggest that any service facility know and understand the relationships within the Catholic Church. The lines of communication from the parish and pastor through the Chancellor and Diocese are unique to the church. Knowing and trusting the service provider as a partner will avoid many of the problems that can arise in a claim.

TEAM GALLAGHER

James MartinezGGB

CENTENNIAL, CO

1. How long have you been at Gallagher?

3 years

2. What was your major in College/Graduate School?

Accounting

3. What drew you to Gallagher? The people and entrepreneurial spirit of the organization

4. What does it mean to you to be part of Gallagher’s Religious Practice?

Being part of the Religious Practice is about finding risk management solutions to minimize unforeseen shocks to an organizations balance sheet and enable those religious organizations to focus on their mission and community.

5. What do you think of the DFMC and this gathering of Fiscal Officers of Dioceses?

DFMC is a great opportunity for peers to share best practices and foster collaboration.

6. What are you working on credential-wise?

FRM, CIC, CFA

DFMC 2017


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The IRC story. Are we truly ever ready?As shared by Peter A. Persuitti, Managing Director, Gallagher’s Nonprofit Practice, and retold by our Glendale CA broker team — led by Gallagher’s Tim DePriest MBA.

I was doing as I typically do on any given day — engrossed on a teleconference, and all of a sudden a handwritten note was quietly slipped in front of me so as not to disturb my call. “You need to get off the phone; we have had an assailant attack at one of our nonprofit client’s location.”

As I quickly focused on this multi-site large nonprofit (Inland Regional Center “IRC”) that serves individuals with developmental disabilities in San Bernardino and Riverside Counties (and its 44-year history), I was at least familiar with the surroundings due to the fact that I worked for the Sisters of Charity of the Incarnate Word in the city of San Bernardino years earlier.

However, being prepared — we always hope we are — but are we truly ever “ready”? When I asked this of our local Gallagher team on the ground, a quick response came — “We just had active shooter training last month.”

You may recall the story from December 2016 — the conference center was rented out to a County employee event and one of the employees of the County, along with his wife, angrily left a confrontation with a fellow employee, only to quickly return firing 65–75 rounds into the crowd, killing 4 people and wounding another 21. The IRC employees, all in the two neighboring buildings left of the Conference Center in the photo on next page, followed training by barricading themselves in their offices and remained in lockdown until fire responders vacated the building.

Our Gallagher local Glendale, California, team actually spoke to the facilities manager during the event. One of the key facts at this point was that our Gallagher team serviced both the P&C and Benefits insurance for IRC. This becomes an important factor in our expeditious support. Within 3 hours our team had a conference call with all of the major carriers involved and was able to loop back with the IRC executive team on the following:

• General liability counsel assigned and on-site the same day at the location

• PR Firm assigned to field all question from the media and prep the executive team

• Workers Comp policy info, claims form and Claims @ in case anyone wanted to file a claim before they returned to work

• EAP phone number distributed to all staff

• On-site counseling set up for the following Monday (when the building was set to reopen)

• Adjuster on the property assigned to the site

• Gallagher’s Claims Advocate and Claims Manager assigned

Over the next 6–8 hours employees were moved in groups to The Rock, a church down the street. While employees were released that evening, many did not have their purses, keys, wallets, etc. (still in lockdown on the site). Even the cars in the parking lot were locked down and it was still unclear when they would be released. Even though we thought that the building would reopen on the following Monday, that was not the case.

In fact, the employees weren’t able to get their cars out of the parking lot for another 4 days, and it wasn’t until 8 days when the FBI allowed small groups of 7–10 employees at a time to enter the building and get their belongings.

The Executive Directors and Director of HR created a Crisis Response Team, with almost an exclusive focus on the well-being of their staff and the community they serve. Since there was no phone tree in place, communication with staff was the most difficult hurdle during the event. We helped create a one page-document and distributed to supervisions and any known personal email addresses for staff specifying how to reach out for counseling and EAP services. The IT team was able to change the main call-in number to provide information to employees about the EAP services and building reentry as info became available.

In the aftermath the IRC leadership referenced a second location in Riverside as the “lifeboat that kept them afloat” during the time the building was closed. Our team helped schedule on-site and off- site counselors. Cigna, Anthem and Kaiser all provided counselors—with some even being volunteer counselors! In fact, we calculate the volunteer donated hours to equate to over $226,000!

We asked our team, “What did we all learn?” They provided the following insights:

• Make sure you as a nonprofit work with a broker and carrier who are service-oriented and are large enough to have the resources to assist you should an event like this ever occur

• Invite your insurance broker to be a part of your disaster preparedness planning. Plan out scenarios to determine if you have the correct policies in place and how and when those policies will respond

• Some insurance coverage nuances:

» WC claims typically have a 6–8 week lag time. Events like this can trigger other stressors in employees’ lives

» Property — Business Income | Extra Expense. With the building “uninhabitable” IRC will not have to rent space. Terrorism was declined on the property — think about that one more carefully.


» Workplace Violence — this was included in the package policy with a $50,000 limit

» Employee Assistance Program (EAP) — in the first 2 months following the incident, the EAP has been the most vital policy in regards to recovering employee well-being

» Security — a consulting firm was hired to make recommendations for additional security measures that can be taken to further secure the site in the future.

With 44 years of experience and more than 31,000 individuals with developmental disabilities served and as one of the largest regional center in the state of California, the IRC certainly lived out its core values of independence, inclusion and empowerment in its response to this tragic event. While it will never be the same, we are confident it will rise above the challenges to continue its positive impact in society. We are honored to be part of the comprehensive IRC team!

Inland Regional Center, formally Inland Counties Regional Center, Inc., is a government founded not-for-profit public benefit corporation that provides

services and programs to more than 33,000 people.

Headquarters: San Bernardino, CA Founded: August 1971

“Start a new conversation; refresh your approach; create a revitalized vision by learning from your experiences and putting new ideas into action.”

— Debbe Kennedy

DFMC 2017


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Gallagher “Alumni”Peter A. Persuitti, Managing Director, Religious Practice, Arthur J. Gallagher & Co.

We have an interesting dynamic at work in our Religious Practice at Arthur J. Gallagher & Co. — what I would call an interest by other faith-based programs in our team and its expertise. As I think about this dynamic, I believe it speaks to the strength of our practice, our team, our culture and our company and as such, I thought I would recognize a few of our “alumni” who have gone on to do great things in the faith-based world:

Tim Harris Tim was a relatively younger producer who came to our Cleveland, Ohio office from Wharton Business School. He worked in both our healthcare and religious practices. Over time, he felt a calling to apply for the CEO position of the Insurance Board, a national captive program that works with three denominations — United Church of Christ, the Disciples of Christ and the Presbyterian Church USA. Today, Tim leads the “IB Team” out of Cleveland and orchestrates a staff of over 30 along with an agency network and is recognized as one of the larger captives domiciled in Hawaii.

Jerry SparksJerry was a merger partner from Springfield, Missouri, where he led a successful, smaller agency. During his time at Gallagher we created a risk financing program for the Assemblies of God that included a risk retention group and a protected self-insurance program. Over time, Jerry felt a calling to work directly for the Assemblies of God, based in Springfield, Missouri. Today, he leads their insurance and risk management program.

Rich McKenna and Michael VollmerRich McKenna began his career serving the Archdiocese of New York while attending law school at night. He went on to be CEO of Gallagher Bassett, the global claims administration arm of Gallagher. Michael Vollmer formerly served on the broker team of many dioceses while he worked for Gallagher’s Itasca service team. Today, both Rich and Michael, along with a number of other former Gallagher colleagues, serve the Christian Brothers Risk Pooling Trust, a premier national service provider of insurance and benefit services and is among Gallagher’s largest clients in the Religious Practice.

Dennis O’HaraDennis was another merger partner, at the time living in Los Angeles. He was asked to move to San Francisco to lead Gallagher’s regional diocesan team and his career blossomed, as he took on key roles serving The Ordinary Mutual and Western Catholic Insurance Company, while also contributing as a leader in our global Religious Practice. In August he said yes to a new calling outside Gallagher as CEO and President of The National Catholic Risk Retention Group!

How can we not be proud of these colleagues and their commitment to serve in new and meaningful ways. What is also great is the connection we all keep to this day — we value these relationships which extend far beyond the boundaries of a company or label. We are one serving the Church…just in new and different ways…together still!


TEAM GALLAGHER

Tim WaltersINSTITUTIONAL INVESTMENT

AND FIDUCIARY SERVICESPITSBURGH, PA


5 years


BA in Economics from Denison University

3. What drew you to Gallagher? Chance to continue my career in investment advising for a growing company that provided me opportunity for professional and personal growth.


A chance to expand my knowledge base of the challenges facing my clients to help me become a better consultant and advisor.


As an investment advisor, I think DFMC is an opportunity for this group to come together and discuss how the current national and global political environment is affecting their investments and what opportunities exist to further the Dioceses’ social and moral mission through their investment choices.


Chartered Financial Analysts (CFA) and Certified Alternative Investment Analyst (CAIA)

Arthur J. Gallagher (AJG) and Risk Placement Services (RPS) assisted four Dioceses in increasing their Sexual Misconduct Liability (SML) limits. Three Dioceses added additional limits with Beazley and the other with Munich Re by providing additional $7 Million in limits for just their lay employees.

“Survival of the fittest is out...Survival of the Connected is in!”Stanford Social Innovation Preview “Advancing the Art of Collaboration”

DFMC 2017


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� Medical, Rx, Dental Vision and Wellness Plans

� Open to organizations listed in the Official Catholic Directory (with 20+ eligible employees)

� 56-member “Trustors” covering 28,000 lives

� All plans are self-insured through an ERISA Trust to align coverage with the Catholic Directives

� Reta sets “premium” funding rates for each Trustor

� Trust operations are self-governed by Trustees

Diocesan Trustors in Reta

www.retatrust.org

• Archdiocese of Portland, OR

• Archdiocese of San Francisco, CA

• Diocese of Belleville, IL

• Diocese of Bismarck, ND

• Diocese of Boise, ID

• Diocese of Cheyenne, WY

• Diocese of Great Falls-Billings, MT

• Diocese of Helena, MT

• Diocese of Lafayette, IN

• Diocese of Las Cruces, NM

• Diocese of Las Vegas, NV

• Diocese of Monterey, CA

• Diocese of Manchester, NH

• Diocese of Norwich, CT

• Diocese of Oakland, CA

• Diocese of Orange, CA

• Diocese of Portland, ME

• Diocese of Reno, NV

• Diocese of San Bernardino, CA

• Diocese of San Jose, CA

• Diocese of Santa Rosa, CA

• Diocese of Tucson, AZ

• Diocese of Tulsa, OK

• Diocese of Victoria, TX

Reta, a Catholic Healthcare Trust


A Reta Trust reference pricing case study — increasing the purchase of lowest cost medicationsBy Robert Bournet, J.D.

Unlike most consumer purchases, buyers covered by health insurance do not know the retail price or the discounted price that pharmacy benefit managers (PBMs) pay for prescription drugs. They are insulated from the true cost of medications because they pay a small copay of $10, $20 or $30 for a month’s supply of a generic or brand name drug.

For drugs that treat the same condition and are therapeutically equivalent, the price between the generic and brand name versions can vary by hundreds of dollars. The Reta Trust decided to make its members aware of the true cost of all medications when there are multiple versions of the same drug, and have its PBM set a “reference price” that the PBM would pay for all similar drugs. When a member fills a prescription for a brand name version of a drug with lower cost alternatives, the PBM sends a letter to the member listing all the options, and the full discounted price of each drug. If the cost of the brand name version of the drug exceeds the reference price set to the lowest cost option, the covered member is responsible for the excess cost on future refills, unless they obtain an exemption on clinical grounds.

The University of California, Berkeley School of Public Health conducted a study of data from the Reta Trust Reference Pricing program to determine the impact on buyers purchasing behaviors and the resulting cost savings to employers participating in the Reta Healthcare Trust. The study was published in the New England Journal of Medicine on August 17, 2017. The study found that

before July 2013 the date the program started, the Reta Trust paid widely different prices for drugs within therapeutic equivalent classes. In July 2013, the Reta Trust limited its payment to the price of the least costly drugs in each class, which resulted in an increase of 7.0 percentage points in the probability that patients would select the lowest-priced drug in the therapeutic class, a 13.9% reduction in the average price paid per prescription, and a 5.2% increase in the average member copayment. In the first 18 months after implementation, reference pricing was associated with a spending reduction for the Trust of $1.34 million, with an out-of-pocket spending increase for Reta Trust covered members of $120,000 when members chose to purchase the highest cost drug.

Pharmaceutical reference pricing has been associated with a decrease of 10 to 12% in drug prices in European and other nations, a reduction that is very similar to that reported for Reta’s insured U.S. population. In the United States, reference pricing has been used primarily for surgical and diagnostic procedures and has resulted in spending reductions of 20% for joint replacement, 18% for cataract removal, 21% for colonoscopy, 17% for arthroscopy, 12% for computed tomography, and 32% for laboratory assays.

The Reta Trust has been initiating innovative programs to reduce healthcare costs for Catholic employers for over 40 years. Its plans comply with the Ethical and Religious Directives on healthcare and cover more than 30,000 members of Catholic dioceses and religious organizations throughout the U.S. For more information about the Reta Trust, go to www.retatrust.org.

www.retatrust.org

Welcome 2017 New TrustorsDiocese of Boise, IDDiocese of Reno, NVDiocese of El Paso, TXDiocese of Pueblo, CO

DFMC 2017


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Convocation — a TraditionPeter A. Persuitti, Managing Director, Religious Practice, Arthur J. Gallagher & Co.

Since 2002 Gallagher has offered a nexus for the Church, now grown to include the global diocesan community and our client dioceses in New Zealand. You can read more online at ajg.com/convocation where you will also find tons of resources.

In the early years we were all sensitive to the challenges of the times and indeed the weakened morale we all experienced, primarily due to the misconduct crisis. At Gallagher our Religious Practice Leadership Team felt a calling to find ways to bring the Church together. Initially, it was an annual gathering and we expanded our outreach to include a broader community of service provider partners, who today are so vital to the funding and programming of the event.

In our first year we had 94 attendees and Charles “Lynn” Lowder was our keynote speaker — what a powerful message this Marine Corp Major had for us — compassion and fortitude in a time of crisis. Just google his name and you can see remarkable stories of his success — how about this one “Today Lynn is CEO for service disabled veteran owned small business focused on the construction industry.” By the way for 10 years he was Chairman of the Risk Management Committee of the Chicago Area Boy Scouts of America and it appears his children attended Benedictine “Benet Academy” in Chicagoland!

In 2003 we had Pamela Davis inspire us with her success in getting two key foundations to fund ($10 million capital) a self-insured program for nonprofits in California…she has gone on to have a national program Risk Retention Group and Property Captive and writes nonprofits in most states — and has “captured” the URL www.insurancefornonprofits.org Imagine the vision and

drive taking on such a massive national undertaking. Today more than 17,000 nonprofits are insured in this program (Gallagher’s Nonprofit Practice is the leading broker for the program) and Pamela Davis was named one of the Elite Women of 2017 in Insurance Business America! The group is sitting on more than $350 million in cash and invested assets and is rated A (Excellent) by A.M. Best.

In 2005 I was thrilled to introduce Dr. Stephen Behnke, my former Latin Student at Portsmouth Abbey School (Rhode Island). He went on to get his BA in Classics from Princeton (and deliver the commencement address in Latin!) and his JD from Yale and his PhD in clinical psychology from the University of Michigan. He also has a M.Div. degree from Harvard Divinity School. Today, Stephen is a consultant and educator in Law, Ethics and Religion. I retained this thought from him, “Being a Catholic leader in your profession, it seems to me, means being able to articulate a vision of your work as noble, both in its mission and in your daily affairs.”

We pivoted to every two years, given the expense and sensitive to the time commitments of everyone involved. Recall all expenses for diocesan staff attending are fully funded by the program. We were so fortunate to have our service provider partners step in and allow us to achieve a whole new level of commitment and funding. Fast forward to 2010 and we truly have a story to tell. Recall there were significant damage in the Nashville area and we had arranged the Gaylord property as our remarkable venue. Well, the storms caused the property to be flooded and inoperable and we asked the question, “Do we put people in harm’s way?” All of you encouraged us to find a way forward, we consulted with our

Lori Flodberg (AJG), Mike D’Ercole (formerly Raleigh) Barb Walsh (Ementa, Cincinnati) Mark Noffert (AJG), Paul Kunkel (GB)


I had the opportunity to attend the 2010 Convocation in Nashville, Tennessee. I was concerned at first that the Convocation would not be able to be held in Nashville due to the severe flooding that devastated portions of the city in early May. However, thanks to the hard work of everyone involved, the 2010 Convocation did proceed.

To me, there are two great aspects of the Convocation. First, it gives us the opportunity to participate in sessions where we are able to hear timely topics that have a direct impact on our day-to-day work. The sessions are highly informative and give us many practical applications to take back to our Diocese.

Secondly, the Convocation gives us the opportunity to gather with other CFOs or Risk Managers from around the country. We are able to share information and develop a support network to provide assistance when problems or issues arise. This support is invaluable as many of us do our work for our respective Diocese.

I want to commend and thank Arthur J. Gallagher & Co. for conducting the 2010 Convocation.”

—Bob Cox | Treasurer, Diocese of Evansville, IN

local Nashville team who took photos all along the way from the Nashville airport to downtown to show it was safe! We were lucky to have a clause in our contract that allowed us out, we turned to a client — Loews Hotels — and we secured a last-minute venue across from Vanderbilt! We will let Bob Cox of the Diocese of Evansville give the last word!

In 2012 we “moved” to the East Coast and hosted the event in Washington, DC (Georgetown). The interest and demand grew to where we had to book a second hotel…quickly! We exceeded 200 attendees and orchestrated 30 workshops! We engaged more than 30 service provider partners in support and we welcomed Janet Wagner-Wilhelms to our planning team — how lucky we are to have her to this day! Do you remember the iPads we introduced as part of the package! We took advantage of our location to have the then CEO of GuideStar, Bob Ottenhof, speak to us. Bob is now the President and CEO of the Center for Disaster Philanthropy! Oh, do you remember what group surprised us at dinner where Tom Ruggieri (at the time CEO and Founder of Advisen) spoke? The Georgetown Chimes, Georgetown University’s oldest all-male a cappella singing group!

How about his “Napa Institute!” For our event, we even had morning Lauds in Latin in the Our Lady of the Grapes chapel that year! Our corporate support grew and allowed us to expand our gathering to more diocesan leaders!

Thought leader Patrick Lencioni captured our attention with his “four disciplines of a healthy organization.” He would go on to

DFMC 2017


Viewpoint

help start the Amazing Parish movement! By the way, this was one survey comment on his talk, “Best speaker of the convocation. Very timely and relevant. Could he be encouraged to make a presentation to the Bishops at their USCCB conference?!”

2014 found us on the other coast in Napa, thanks to the generosity of Tim Busch! Tim would go on to endow Catholic University’s Business School and see that every one of his hospitality properties would have a chapel.

For 2016 we moved back to the middle of the country and landed in Dallas at a Gaylord property close to DFW. Our event became global with the participation by our diocesan clients in New Zealand. Their appeal and story of the earthquake was compelling. We all learned a bit more about Powernoodle and found new ways to interact real time, combining our iPads and real time tools. Powernoodle is a cloud software that helps organizations make better decisions by leveraging stakeholder intelligence, and we certainly tried to extend our technology via this resource…and anonymously! Founder Deb Krizmanich of Stratford, Ontario (Canada), was recently featured in Canadian Business and has grown considerably since its founding in 2010, attracting undisclosed funds from angel investors.

We are excited about 2018 and the opportunity to connect as community and as professionals. None of this would be possible without the support of our Gallagher corporate leadership and our very generous service provider partners. Keynote speakers, 30 workshops, Worship — lift up your ideas and help us make this YOUR event and your opportunity to share your successes so others can benefit as we move from the “survival of the fittest” to the “survival of the connected.” We will announce our plans at our Gallagher Gala DFMC Dinner Tuesday, September 26, and we look forward to your engagement by sending us your ideas to www.ajg.com/convocation — due by December 29, 2017. Our registration site will open up February 2018. Hint — we will still be in the middle of the country!

Patrick Lencioni, The Table Group

Three Dioceses increased their Excess Casualty limits with the assistance of the Arthur J. Gallagher (AJG) and Risk Placement Services (RPS) teams.


MAY 22 AFTERNOON (TUESDAY)

BPIC Board Meeting Partners’/AJG/BPIC Board Dinner

MAY 23 MORNING (WEDNESDAY)

BPIC Annual Members’ Meeting

MAY 24 MIDDAY (WEDNESDAY) TO MAY 25 MIDDAY (THURSDAY)

Convocation

Radisson Blu Mall of America Minneapolis, MN

May 23–24 MMXVIII

17GGB23491

Pastoral ministry in a missionary key seeks to abandon the complacent attitude that says:

“We have always done it this way.” I invite everyone to be bold and creative in this task of rethinking the goals, structures, style and

methods of evangelization in their respective communities.

— Evangelii Gaudium (p 18), Pope Francis, Apostolic Exhortation

Presented by

RELIGIOUS PRACTICE

PRELIMINARY PROGRAM & REGISTRATION LIVE — FEBRUARY 2018

www.ajg.com/convocation

Best Practices | Successes | Collaboration | Networking | Idea Sharing

We welcome your ideas – Submit to [email protected] by December 29, 2017

RELIGIOUS PRACTICE

DFMC 2017


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Moving forward under PPACABy Petula Workman, J.D., Gallagher Benefit Services | Religious Practice

Although both the House of Representatives and Senate considered legislation this year to repeal substantial portions of the Patient Protection and Affordable Care Act (“PPACA”), those efforts were ultimately unsuccessful. Thus, PPACA remains the law of the land, and as such, religious employers must be aware of the unique ongoing compliance issues that may apply to their organizations.

Religious employers that are or have entities qualifying as “educational institutions” should carefully evaluate counting hours requirements. Even though employers have been required to comply with PPACA requirements governing the determination of who is a full-time employee for purposes of the Employer Mandate and Sections 6055 and 6056 reporting for several years now, new challenges may arise as employees change positions, the amount of hours that they work, or move between organizations within a controlled group. Special issues arise for religious employers with educational institutions and non-educational institutions within their controlled group because educational institutions are subject to special “break in service” and “employment break” rules. Care should be taken to document and analyze employees providing services to both types of institutions within the same reporting year to correctly apply the applicable counting hours rules.

Religious employers with affiliated organizations should continue to monitor PPACA preventive services accommodation guidance. On January 9, 2017, the Departments of Labor, Health and Human Services, and the Treasury (collectively, “the tri-agencies”) released Affordable Care Act Implementation FAQ Part 36 addressing accommodations for eligible organizations that object on religious grounds to providing coverage for contraceptive services. PPACA requires that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group to include coverage of certain specified preventive services without cost sharing, including all Food and Drug Administration-approved contraceptives, sterilization procedures, and patient education and counseling for women with reproductive capacity, as prescribed by a health care provider (the “contraceptive mandate”).

Health plans sponsored by “religious employers” (as that term is defined under PPACA) were exempted from the requirements, and an accommodation process was developed for other qualifying entities with objections to the contraceptive mandate, called eligible organizations. Several eligible organizations challenged the

accommodation process on the grounds that the process violated their religious freedoms under the Religious Freedom Restoration Act. Several cases were consolidated before the U.S. Supreme Court, and as a result of those lawsuits, the Court issued an order for the tri-agencies to work with interested stakeholders to determine whether the existing accommodation process could be modified to resolve the plaintiffs’ objections. In FAQ Part 36, the tri-agencies indicated that they found no feasible approach that would resolve the concerns of religious objectors, while still ensuring that the affected women receive contraceptive coverage, and thus declined to modify the accommodation regulations at this time.

Religious employers should carefully evaluate the impact of loss of grandfather status. Upon loss of grandfather status, employer-sponsored health plans must cover eligible individuals enrolled in FDA-approved clinical trials for plan years beginning on or after January 1, 2014. Approved clinical trials include phase I, phase II, phase III, and phase IV clinical trials that are conducted in connection with the prevention, detection, or treatment of cancer or other life-threatening disease or condition and are federally funded through a variety of entities or departments of the federal government.

This means that non-grandfathered group health plans may not: (1) deny coverage for participation in an approved clinical trial; (2) deny, limit, or impose additional conditions on coverage for routine patient costs for items and services furnished in connection with a clinical trial; or (3) discriminate against individual because of participation in a trial. The plan must also provide coverage for “routine patient costs,” which include items and services typically provided under the plan for a participant not enrolled in a clinical trial. However, the plan is not required to cover those items and services that include: (a) the investigational item, device, or service itself; (b) items and services not included in the direct clinical management of the patient, but instead provided in connection with data collection and analysis; or (c) a service clearly not consistent with widely accepted and established standards of care for the particular diagnosis.

Some of the approved clinical trials may clash with a religious employer’s firmly held religious beliefs. For example, multiple approved clinical trials involve embryonic stem cell research. Several of these clinical trials are actively recruiting for volunteers, which may mean that a religious employer’s non-grandfathered plan would have to cover the routine costs associated with the trial. Religious employers should carefully review the list of


approved clinical trials to determine if coverage of any of the treatments would conflict with their religious beliefs. In addition, religious employers should be careful not to remove all references to investigational or experimental benefits in response to the requirement that non-grandfathered plans cover clinical trials because that would then require the plan to cover non-cancer, non-life threatening benefits also, and this would potentially include coverage for embryonic stem cell research related to non-cancer, non-life threatening conditions such as infertility and eye disorders. Note that, unlike the contraceptive mandate, no religious employer exemption or religious-affiliated employer accommodation exists for clinical trials.

Submitting a written statement to a carrier is essential for church-sponsored fully-insured plans receiving MLR rebates. As a prerequisite for a church to receive and retain any portion of an MLR rebate for its fully insured health plan, the church must provide a statement to its insurance carrier stating that it will administer and distribute the rebate in the same manner that non-federal governmental plans do. Without such written assurance, the insurer must pay the rebate amount directly to the policyholder’s participants covered by the policy during the MLR reporting year on which the rebate is based. This means that a church could lose its share of the rebate — regardless of the share of the total premium costs it paid to the carrier — for failing to provide the statement.

The participant portion of the rebate is to be used, at the option of the policyholder, in one of the following ways: (1) to reduce participants’ portion of the annual premium for the subsequent policy year for all participants covered under any group health policy offered by the plan; (2) to reduce participants’ portion of

the annual premium for the subsequent policy year for only those participants covered by the group health policy on which the rebate was based; or, (3) to provide a cash refund only to participants that were covered by the group health policy on which the rebate is based. In all three options, the rebate is used to reduce premiums or is paid to participants enrolled during the year in which the rebate is actually paid, rather than the MLR reporting year on which the rebate was calculated. The remainder of the rebate may be used by the religious employer for other purposes, but only so long as it has provided the appropriate assurances of how it will handle the participants’ share of the rebate.

Churches sponsoring self-insured health plans are exempt from Form W-2 reporting requirements. Employer-sponsored self-insured health plans that are not subject to federal COBRA (e.g., self-insured church plans) are exempt from Form W-2 reporting of the value of health insurance coverage until further guidance is issued. For example, a church plan not subject to federal COBRA, but required to provide continuation coverage under a state coverage continuation law, would not be required to report the value of an employee’s health insurance coverage on his or her Form W-2. However, churches that provide insured health plans are required to report health care coverage costs even if they are not subject to federal COBRA requirements. Religious-affiliated employers who do not qualify as church plans must still comply with the Form W-2 reporting requirements if they issued 250 or more Form W-2s in the prior year. However, employers may voluntarily choose to comply with those requirements. So, religious employers that might otherwise be exempt may still wish to comply with the reporting requirement.

TEAM GALLAGHER

Tony McLaughlinGALLAGHER BASSETT SERVICES

ROLLING MEADOWS, IL


Completed my first year on September 6


Business Administration—Accounting & Management

3. What drew you to Gallagher? Coming from a Catholic-based organization, the opportunity to expand into all faith-based organizations as well as nonprofits was extremely exciting and created the challenge I was looking for.


The incredible amount of expertise and dedication to this special group of clients has completely blown me away! Each day I seem to meet someone new who is dedicated to truly finding ways to help our clients save money on their risk management/insurance programs, and in turn, the organization is able to return that savings into their ministry. To be part of a group who really understands the significance of what we do on a daily basis is beyond rewarding.


I’ve participated in the DFMC for many years and always find it to be of great value. Anytime you can bring a group of knowledgeable and dedicated individuals together, who share similar challenges, the end result can only be a good one and one that brings real value to our organization as well as the clients we are fortunate to serve.


Nothing currently. The learning curve is quite enough for me at this juncture.

DFMC 2017


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2017 HUMAN CAPITAL INSIGHTS REPORT

Finding Your Footing asa Destination Employer

For copy of this document, go to: https://www.ajg.com/media/1700787/2017-human-capital-insights-report.pdf

https://www.ajg.com/media/1700787/2017-human-capital-insights-report.pdf




Resilience in the face of increasing cyber threatsBy Steve Robinson | [email protected] | Cambridge, MD

2016 was a year of headline-grabbing cyber events that moved information

security up the ladder of priorities in both the nonprofit and corporate worlds. Data has become a highly prized currency and increasing threats call for focused action. Many nonprofit organizations are still behind the curve.

The fastest-growing threats are in the areas of ransomware, social engineering and unfortunately, well-intentioned employees and volunteers making mistakes.

Ransomware is a malware (malicious software) that renders the victim’s computer or specific files unreadable. A ransom is demanded in return for a key to unlock or decrypt the files. Social engineering is the manipulation of people so they give up confidential information or authorize the transfer of money based on fraudulent instructions.

Here are three strategies to help your organization maintain resilience:

1. Develop Data Hygiene Awareness

a. Train your staff to recognize phishing threats and email scams. An email may contain a well-known logo but may not be legitimate. Beware of generic messages that aim to fit multiple situations.

b. Implement strong password protocols. Passwords should have a combination of upper and lowercase letters, numbers and characters. They should be changed often and never shared.

c. Protect the data on your mobile devices with encryption. Most state privacy laws provide safe harbor for encrypted data.

d. Don’t trust — verify! Teach employees that email requests involving monetary or data release decisions must be verified by a phone call. Train employee not to download software to your network without permission.

Incorporate training around information security into employee, volunteer and board member orientation. There are great resources available through the Multi-State Information Sharing Center at www.cisecurity.org and the Department of Homeland Security at https://www.dhs.gov/stopthinkconnect-toolkit.

2. Grab the Low-Hanging Fruit to Improve Data Security

a. Send sensitive information in an encrypted format. Without encryption, there is no guarantee that the message isn’t available to the world.

b. When installing firewalls, spam filters and other security, be sure to change the passwords that come with the equipment; the bad guys know the default passwords.

c. Segregate systems access. Do volunteers need to see the same data as your staff?

d. Collect and keep only the information that is necessary, and only for as long as you need it.

3. Prepare for Privacy Incidents Before They Occur

a. Who is responsible for data privacy within your organization? Clearly define roles and provide resources.

b. Develop an incident response plan. When the network goes down or the screen goes blank, what will be the plan? Have a strategy in place.

c. Consider partnering with a company to conduct penetration testing. This “friendly fire” can provide insight into your information security vulnerabilities.

d. Transfer risk via cyber insurance. The cost for coverage has become more affordable and could be a lifeline for your organization.

It is ironic that organizations whose missions are to make the world better can be most vulnerable to those with malevolent motives. Nonprofits tend to have limited resources and fewer controls when it comes to cyber risks. Developing a plan can make the difference to ensure your organization’s resiliency in these changing times.

DFMC 2017


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Shedding light on your dataBy Tony McLaughlin and Kristi Sands

“Where’s the data, how do I get it, and what’s it telling me?” Given the many hats that must be worn as a leader in your (arch) diocese, these are the questions that should be at the forefront of your mind in today’s complicated business environment. The term “big data” is utilized more and more. In its simplest form means nothing more than taking advantage of the technology we have at our fingertips, capturing data, extracting it in a meaningful manner, and analyzing the results to make informed decisions that maximize your finances allowing you to in turn, capitalize upon what you are able to put into your (arch)dioceses, parishes, and other ministries.

As diocesan fiscal officers, risk managers, and by default many times, claims leaders, seeking the most from their claims and risk management program and/or provider, “big data” is not always easily accessible. Limited resources and systems don’t always allow the detail to be captured as it needs to be in order to ultimately use it to further your stewardship of the church’s funds. Perhaps your struggle is accessing information relative to your claims landscape quickly and demonstrating to Pastors or bookkeepers how their decisions at the entity level is affecting the cost of risk at the Chancery. Or your insight is granular, where you need the view at 30,000 feed to understand where your resources are best directed. Gallagher Bassett, having billions of claims in our system, has harnessed this data, and created the new standard in data accessibility and analytics. Luminos is the answer and as the name implies, shedding light on your (arch) diocesan data.

From its inception, Luminos was developed with a commitment to our Catholic clients. Gallagher Bassett partnered with Origami Risk, Advisen’s top-rated platform, and built out and up from there creating a RMIS solution that delivers exactly how and where you need it. The ability to build your own unique “pyramid” representing your (arch) diocesan hierarchy is the cornerstone of achieving meaningful data output. Gallagher Bassett’s long-term Catholic perspective allows us to appreciate the ever-changing demands from your (arch) diocese. We guide you through not only a deep dive into the status of a single event within a claim to displaying the macro-statistics for an entire program’s performance to your Finance Counsel. This information could assist you as you shepherd your loss control and safety committees as they seek to keep parishioners and students safe during times of worship or education.

Luminos is built for any demand for data analysis and is as approachable to the non-claims personnel as well as the CFO or Risk Manager of a diocese. While many RMIS systems are intimidating by their very nature, Luminos was built with the end-user ever at heart. Keeping Luminos user friendly and client-focused was critical to the development team in building dashboards, creating standard reports, and allowing flexibility in both based upon the needs of our clients. Without simplicity of use, people won’t use it the way it should be and therefore, miss out on the power that is data visualization.

Imagine signing into Luminos and on one screen seeing graphs and charts that answer these often-asked questions:

• What types of claims are bringing the most frequency to my program?

• Where should I be leveraging resources to improve my loss experience?

• How many claims do I have in litigation?

• What entities are bringing the most frequency to my program?

• What are my five worst claims by ministry or line of coverage?

• Where do I stand relative to my SIR?The list is only limited by your imagination as the dashboard is 100% customizable to each user’s needs. Hundreds of universal reports are available and only a few clicks away. Can’t find what you’re looking for in a standard report? No problem, you have the ability to modify any existing report or build your own.

Luminos is also the platform whereby you can track policies, automate the insurance allocation process, more accurately assess your total cost of risk, complete OSHA entry and reporting, track COPE data for your properties, manage your auto fleets and assets, track and measure safety programs, provides mail merge capabilities, and so much more.

Gallagher Bassett has Diocesan finance and risk personnel using Luminos today who find it useful in all aspects of their position.

“I am using the system to review claims, notes, reserves, etc. But also using the report of incidents/claims reported during the week to give (our CFO) an update on Friday as to the status of new claims and what has changed in existing open claims. We have just started doing presentations at the deanery meetings in the Diocese and I am using Luminos to get claim summary information on the entities within the Deanery to be presented as one set of statistics (as to not pinpoint any specific entity)” Deborah Tauro — Diocese of St. Augustine


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8/29/2017 “It is very easy to use. I can quickly pull claim data, do research, and pull financial information.”

Jean Ori — Diocese of Pensacola-Tallahassee

Workers Compensation

Loss Control Dashboard

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8/29/2017

DFMC 2017


Viewpoint

T2 — Exponential insight and food for thoughtBy Tony Abella and Tony McLaughlin

Preparing for a catastrophic event like Hurricanes Harvey and Irma is something that while time consuming, will pay so many dividends if or when you find yourself in the path of one of these storms. This article will focus on the immediate response and recovery efforts that must be considered in order to position yourself in the best possible light when it comes to an effective and efficient response to maximize the resources your (Arch) diocese needs from your insurance program as well as other sources of revenue post-storm.

All of these events involve both wind and water damage. Understanding how your

insurance program, as well as FEMA or NFIP, will respond to each type of damage is crucial. There should be no concern with notification to the appropriate parties as these unfortunate events give us plenty of warning as to where and when they will cause their destruction however, when it comes to the governmental program and agencies, be sure to know exactly what is required in regard to both notice and documentation of damages.

The following is a list of items that must be on your minds and factored into your response to those who need you so much post-storm:

Property values — depending on when your last appraisals were completed on your properties, maintaining accurate values becomes even more critical after a storm like Harvey or Irma as due to the demand, prices always increase thereby increasing the cost of the repairs necessary. How does my coverage work relative to the per building limits I have described on my schedule of property values?

Approved contractors — who do I call, or is my insurance company prepared to provide reputable contractors to perform the water mitigation, property protection, and restoration required at all of my locations? Your list of approved contractors post-storm will need to expand due to the demands upon everyone. It’s critical this is part of your catastrophe planning as this immediate response will shorten the length of time it takes to complete the necessary work at each of your locations. It’s also important to advise those involved who should not be allowed to be involved due to previous issues with any given company.


Coordinating a quick, yet proper response — A poorly planned quick response can ultimately lead to a slower and more expensive recovery as well as expose you to costs that may not be covered by any form of insurance. Engaging companies to quickly respond to the damages seems like the right thing to do. However, this must be coordinated with your insurance company. Agreeing to the scope of the work to be performed, as well as identifying any mold or hazardous materials that must be properly addressed, is critical and must be performed in the proper sequence. Engaging licensed experts as necessary may cause a short delay up front, but by following their directions as to how to properly address the work, will actually speed up the process and shorten the overall duration of the project.

Loss of income/extra expenses — while focusing on the actual physical damages to your properties, someone needs to begin accounting for, and tracking any expense that may fall into one of these categories and covered by your insurance program. Obtaining an immediate summary of what can be considered, what documentation will be required, how long does this last, are there any limitations/sub limitations, that I need to be aware of and immediately begin tracking? Assigning someone, or a team, to focus on this part of your claim from the beginning is critical to maximizing the recovery from your insurance program. These initial efforts will also shorten the time it takes to settle this part of your claim as well. If you are in regular communication with your carrier, and always on the same page from the beginning, the approval of payments will be much easier when submitted.

Pre-negotiated Terms and Conditions — Being extremely clear to communicate the scope and costs associated with any vendor’s engagement is also crucial and will avoid issues down the road when the invoices start rolling in. Coordinating this with your insurance provider is critical as they need to be involved every step of the way. Receiving their approval for anyone engaged will help you avoid surprise invoices which can slow down the payment process.

Cash flow — Have a discussion about what it takes for them to release funds when you need them. See if they will provide you with advances that will be credited toward any ultimate ACV or RCV settlement later.

Emergency repairs — Every property insurance program requires and will pay for the necessary emergency repairs to protect the property from further damage. These include the cost of temporarily boarding up and/or covering with tarps or other materials as well as drying up the inside of buildings and removing some properties to more secure locations. It is crucial to document each expense, and backing up with a photograph is of great help. Expect delays in the availability of adjusters as well as full repair contractors, but do not wait for them in order to complete the emergency repairs.

Fr. Greg Boyle, S.J.

Homeboy Industries

MMXVI

A Networking Group for Diocesan Risk Managers started in 2007

Another Diocese improved their Nursing Home Professional Liability limits by purchasing an additional $6 Million in limits with Munich Re through Arthur J. Gallagher (AJG) and Risk Placement Services (RPS).

DFMC 2017


Viewpoint

A Networking Group for Diocesan Risk Managers, Started in 2007

TEAM GALLAGHER

Marty RocheRPS

CHICAGO, IL


7 years


Risk Management at Illinois Wesleyan University

3. What drew you to Gallagher? Gallagher has such a strong family atmosphere. Coming from a large “Southside Irish” family, I grew up surrounded by aunts, uncles, and cousins all within a few square miles, and Gallagher had that same feel to it. Despite Gallagher’s worldwide presence, I felt like I was walking into a very intimate community of friends and family.


Gallagher has a long-standing reputation in the Religious niche, and it has been a privilege to be part of its history. Personally, I grew up in the Catholic Church in Chicago’s suburbs, and it has been very meaningful to work alongside Religious entities as a professional.


The DFMC is rich with collaboration and tradition. It is a great way to meet annually with our many peers separated by location, yet very much connected in the risk management challenges and successes of our businesses.


I am currently in the process of obtaining the Associate of Surplus Lines Insurance designation.

On July 27 we convened virtually (online) — diocesan risk managers and service provider partners — to tackle risk and policy issues lifted up by dioceses over time. We tend to start each webinar with a market update on all lines of coverage from the RPS Underwriting Team, led by Shawn McCall. This helped our discussion around the big picture of July renewals. Chris Spala took us through a bit of a deep dive on the diocesan claims review — trends, frequency and severity issues. There is clearly a spike in money, securities issues (fraud) and that was something Mike Witka, Archdiocese of Indianapolis (and co-creator of this Forum) wanted to discuss in depth.

Tony McLaughlin of the Gallagher Bassett Religious Practice reported on a paper he was part of at the CLM Midwest Region Religious Segment Program on EPL — Common Pitfalls, Education Strategies, Mitigation — Post Claim and Mitigation Strategies for Claims and Outside Counsel. Peter Persuitti shared some insights from this year’s 16th “Common Ground” meeting, a gathering of CEOs of captives of faith-based programs. Cyber risk, renewals, SML and security issues were among the topics this group noodled on for two days at the new Gallagher Global Headqarters in Rolling Meadows.

Our 2017 program of events has included an in-person gathering in January in Florida and a webinar April 27 and we will finish up the fourth quarter with a webinar again on October 17. Let us know if you want to join our national networking — at 10 a.m. Central on Tuesday, October 17!

Peter A. Persuitti Arthur J. Gallagher & Co.

One Diocese increased all their Professional lines (E&O, D&O, etc.) limits of coverages to $50 Million through the partnership of Arthur J. Gallagher (AJG) and Risk Placement Services (RPS).

2017 • January 31st – February 1st

• April 27th

• July 27th

• October 17th


CORE360™ — optimizing your cost of risk to help fulfill your missionBy Bill Baker | [email protected] | Bloomington, MN

Risk is inherent in every nonprofit organization and pervasive in every

aspect of your organization. Transferring this risk by purchasing insurance is a key way to reduce the cost of your risk but what other cost drivers do you have — what other expenses could you write that could be avoided or reduced?

We believe there are six primary cost drivers that must be addressed in order to optimize your total cost of risk (TCOR). A thoughtful and strategic execution of impacting these cost drivers will ensure that you are being a prudent financial steward:

1. Insurance Premiums is the most obvious cost driver and one in which many of the other cost drivers also impact. Transferring risk to an insurance company is a complicated transaction, which should include your story that encourages partnership.

2. Program Structure is the risk/reward choices you make in the policies you purchase and what deductibles and limits are chosen to make up your program design. Deductibles that are too high or too low or limits that are too high or too low will cost you more money than necessary. The strategic use of analytics and benchmarking is critical to help you negotiate your best customized program.

3. Coverage Gaps occur when losses are not covered due to a policy that is not as broad as it could be or an exposure that has not been addressed. Every insurance policy has numerous policy exclusions and many are able to be removed with the proper negotiation.

4. Uninsured and Uninsurable Losses are the fourth cost driver. Uninsured losses could have been insured if the proper insurance policy was purchased but wasn’t. A good example of this is having a cyber/privacy loss but before that loss occurred, a decision was made to not buy cyber coverage. Uninsurable losses are not insurable but still need to be prioritized, managed and mitigated.

5. Loss Prevention and Claims represents your participation in a loss and are the pre and post-loss efforts to prevent losses and mitigate claims to ensure fair and reasonable results. Safety, employee training, broker claims advocacy are all examples of these efforts.

6. Contractual Liability is the final and critical cost driver that encompasses the costs resulting from improperly transferring a risk or unknowingly assuming liability from a third party. It is critical that your insurance program aligns with your contracts.

We work with our nonprofit clients to help them reduce their fixed costs. Identifying the impact of cost drivers is big part of this. Our holistic CORE360™ approach guides you to the best possible results within your risk management program to allow you allocate cost savings towards fulfilling your mission.

DFMC 2017


Viewpoint

How lucky I am to work with great nonprofit leaders!By Ampy Jimenez | [email protected] | Miami, FL

In working with nonprofits for more than 11 years, I have witnessed many

individuals leaving corporate America to become part of a nonprofit. Most of the individuals I have seen making this move have a financial background.

Many times in corporate America, a person finds that his or her heart is not in the work. Work can easily become a meaningless chore and just a means to earn a paycheck. Working for a nonprofit will allow you to see, day in, day out how your efforts positively affect people in need. Homeless shelter employees see people sleeping in a warm bed, food pantry employees watch hungry kids bite into their first meal of the day, and the list of heartwarming scenes goes on. Nonprofits are a great place to maximize your cognitive talents and compassion.

When you love your job, it doesn’t feel like work. In turn, it is a great personal reward as you will be working for the benefit of the nonprofit and its mission. If you align your occupation with something you are passionate about, your performance on the job will be better than if you were to work in a corporation without that zeal and passion.

It is common for an employee of a nonprofit organization to make less than his or her for-profit counterparts. Yet the nonprofit world

has plenty of sought-after jobs. It’s been proven that individuals are not just motivated by monetary reward or even recognition, but also by finding purpose in their work. Sometimes, the sacrifice may be a smaller paycheck, but for those in nonprofit careers, it’s worth it.

Many times, you must be willing to trade financial gain for seeing human lives overwhelmingly restored. Not many are willing to make that trade, but the ones that do receive a sense of purpose beyond words.

Employees of nonprofits need to be “on top of their game” and forward thinking. Knowing the competition, innovating and budgeting are all part of the job for a nonprofit manager.

Successful nonprofit employees typically possess most, if not all, of the following characteristics:

• Honesty

• Humility

• Trustworthiness

• Dedication

• Conscientiousness

• Sincerity

• Integrity

Whatever the cause, nonprofits exist as a service to society in some way, and they need good people running them. We are lucky to have very talented people leading the nonprofits we serve!

TEAM GALLAGHER

Melinda MailletGALLAGHER BENEFIT SERVICES

HOUSTON, TX


5 years


Attended Stephen F. Austin with a focus on Education

3. What drew you to Gallagher? My Husband works for GBS, and after hearing about the culture and the people for over five years, I decided to explore the possibility of moving from a competitor to GBS. At that time Robby White ran the Houston office, and I was attending a Houston Office of the Year party, and it gave me a chance to spend some time with him, and he helped me see what I was missing, and the rest is history.


I love the people and the passion they have for the clients we work on. The fact the Niche is so supportive, and it’s allowed me to have a much better understanding of how best to serve my clients. There really is a unique culture to working for religious clients that with the help of Phil and Peter I’ve learned so much and the support and guidance has been awesome.


I’ve been able to bond with my client in a way that would never happen without the DFMC meetings. A great investment on AJG’s part and I believe it to be a great way to bond with not just my clients, but others around the country that attend these meeting. Any one working on a Dioceses is really missing out if they don’t attend these meetings.


Nothing formal, but always a student of the industry and Religious Niche. The fact that we all made it through ACA rollout and implementations in the Religious world is a huge credential to me.

https://www.youtube.com/watch?v=u6XAPnuFjJc


Claims and nonprofits — embracing the opportunityBy Tony McLaughlin | [email protected] | Rolling Meadows, IL

As a third-party administrator (TPA), Gallagher Bassett Services, is fortunate

to work with many nonprofits who assume a prudent level of risk (self-insured) as well as carriers who insure nonprofits (and ask us to manage the claims). Thus, we have a unique perspective of nonprofit claims occurrences as well as expenses related to claims. We also work with corporate giants like United Airlines and Avis Car Rental so our view is very broad.

We are seeing growing medical costs that relate to claims and the growing trend of litigation against nonprofits, who “do good” for the community. We are also observing an escalation in costs to settle slip and fall claims, primarily due to defense and medical costs. We also continue to see a strong correlation on workers compensation claims, in terms of prolonged delays in reporting such claims can lead to larger than expected, drawn out settlements. For nonprofits a claim is an opportunity to live out its mission. What do we mean?

Being able to deploy techniques for mediation and arbitration (as opposed to litigation) can have a significant impact on outcomes and how the nonprofit is viewed by the media. If you are self-insured to some level, there is flexibility in how you handle the claim. For those

fully-insured this opportunity may be diminished, simply because the carrier is in control (its dollars). Our self-insured clients proactively hold regularly scheduled claims’ reviews with us as a way to “attack” the claim development and find ways to close it.

We are observing more nonprofits moving to some level of prudent risk taking, whether it be in alignment with other like-minded nonprofits (as a consortium, group purchasing), or if it is large enough, by itself. This is an exciting development brought on by more sophisticated financial officers of nonprofits and advancements in technology, analytical and actuarial tools—and alternative risk underwriting managers who work with reinsurers.

For the most part, nonprofits have viewed the insurance expense as a fixed cost and a relief of potential exposure on any claims through coverage terms and limits. But we believe it also may be a lost opportunity, if nonprofits don’t find ways to collaborate and leverage their buying power and deploy the proven tools of alternative risk financing. What you will witness is greater control, better informed data and a true “reclaiming dollars for the mission” (reduced fixed costs).

We think this is a great development and we are ready to help!

TEAM GALLAGHER

Saluna NeupaneGALLAGHER GLOBAL BROKERAGE

SAN FRANCISCO, CA


I joined Gallagher March 1 of this year.


Business Administrative Management

3. What drew you to Gallagher? The values and culture of the organization


I have high regards for any nonprofit organizations. Giving back to the community and helping those that are less fortunate is something that everyone wants to commit both financially and physically. Often times most are not able to do both and without the help of Religious and nonprofit organizations, it would be difficult for our society to change all the lives it has. It’s an honor to be part of the practice that helps these organization mitigate their risk.


I think it’s great! When organization come together for a gathering, it encourages the development of professional relationships, sharing of ideas and information and it also brings the community together. This will be my first year attending and I am excited to have the opportunity to join.


CPCU. I am currently studying for the 1st course of the designation

DFMC 2017


Viewpoint

Why nonprofits should be encouraged for their investmentsBy Tim Walters | [email protected] | Pittsburgh, PA

With the unprecedented tone and results of the 2016 elections just

behind us, it is time for the country to come together and access what the future holds. The Institutional Investments & Fiduciary Services practice of Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC, is focused on evaluating the investment landscape for nonprofit organizations and how they can best take

advantage of opportunities within the markets, while still being mindful of protecting your investment portfolio during these uncertain times. Broadly speaking there are three main areas that nonprofits should be encouraged by:

1. Investment markets remain strong. As we enter 2017, stewards of nonprofit investment portfolios can take solace in the fact that the investment markets have displayed a great deal of resiliency. Domestic equity investments, as a whole, have gone up since the elections and there are a number of encouraging signs for continued strength in US equities. The unemployment rate remains low and economists are encouraged by the continued expansion of the workforce and signs of wage growth. The overall strength of the labor market has led the Federal Reserve to raise the Fed Funds Rate for the first time in ten years at the end of 2016 and they have signaled that they expect additional rate increases in 2017. While no one can accurately predict what investment returns will look like at the end of 2017, investors should be encouraged that there are indications that both monetary and fiscal policy can foster continued growth and produce positive results for investors.

2. Unrest is leading to activism. Nonprofits that have a social or moral mission embedded in their organization should be

encouraged about the new developments occurring within Socially Responsible Investing (SRI), Environmental Social Governance (ESG) and Impact Investing. According to the Forum of Sustainable and Responsible Investing, there is approximately $8.75 trillion invested in these types of strategies. This equates to one out of every five dollars under professional management in the US. This figure is only growing. Investors have a number of options available to them as they try to imprint their social and moral mission onto their investment assets. This is not solely limited to traditional investments, but also alternative investments and defined contribution plans.

3. The success of index funds is reducing costs. The debate of whether to use active or passive investment management will be a debate that will continue to rage well beyond 2017. However, with the bull market since the Great Recession, index funds have outperformed the majority of their actively managed counterparts. This relative outperformance of index funds is generating greater competition amongst active managers to retain the assets they have and to stem the outflow of assets into index funds. As a result, the fees charged for investment management services have come down resulting in fees savings for nonprofits and better net of fee performance. These fees savings are resulting in better annualized returns and greater ability to financially support each organization’s mission.

In summary, 2017 is a year of uncertainty. Regardless of ideology and political affiliation, from an investment perspective, nonprofits can be encouraged by the opportunities that are presenting themselves to investors. While not every risk can be eliminated and outcomes guaranteed, prudent asset allocation, investment due diligence and a focus on long term results will allow nonprofits to see 2017 as a year to “Make Your Investments Grow Again.”

Arthur J. Gallagher (AJG) and Risk Placement Services (RPS) developed a new London-based Property program to enhance coverages and limits, including increased Flood and Earthquake sublimits, for several diocesan clients.


Business continuity and resilienceBy Bob Perlman | [email protected] | New York, NY

“Although relatively new to Gallagher and its Nonprofit Practice, I am excited to extend my former experience as an operational leader of nonprofits for more than 13 years to the consultative side as part of the Gallagher global team and network.”

— Bram Bregman, MBAOntario Region, Arthur J. Gallagher Canada Limited

In our increasingly interconnected and interdependent world, crises are more

frequent and resulting in more damage than ever before. Following a crisis, executive leadership is increasingly being asked by stakeholders to justify their organization’s preparedness and response capabilities:

• Does the risk management approach meet the definition of a good control environment?

• Who in the organization approved the decision to accept the risk of the undesirable incident?

• Why didn’t the organization allocate more funds to mitigate or manage this risk?

• Does the organization have a business continuity management program in place?

A recent survey sponsored by CFO magazine suggests that less than a third of senior executives believe their organizations are well prepared to recover from major operational risks.1 Notably, less than

25% believe they are well prepared to recover from a data breach/cyberattack, supply chain disruption/failure or geopolitical disruption.

Importantly, there is a major disconnect between what senior management believes is needed to be resilient and their organization’s current capabilities. More than 86% of senior executives believe their organization will need to be more resilient in the future — but only 46% have developed and tested recovery plans.1

Being resilient means being able to adapt to a world in flux because of rapid changes in technology as well as increasing geopolitical instability. Organizations that have their stakeholder radars turned on get a better sense of the changes that are coming, and of the need to manage risks. As a result, management and organizations are more agile when change is imminent and can implement course corrections to ensure they are resilient.

To maintain resiliency, organizations must ensure they have robust business continuity management plans in place that should be tested, exercised and updated regularly. Plan design must be flexible enough to recover from all hazards; regardless of their nature or scope.1 Source: Finance’s Role in Operational Risk Management — CFO’s Research on Building a Resilient Company

DFMC 2017


Viewpoint

The importance and management of student and athletic accident coverage for diocesan schools and parishesBy Charlie Eisenbies

Gallagher’s Student Health Division is a leading provider of accident services for schools and universities.Despite precautions, serious accidents can and do happen in school settings. When an accidental injury does occur, the focus should be on treatment and recovery, not on the financial impact to the injured party.

Student accident coverage is designed to cover out-of-pocket expenses that the family’s health insurance does not pay, such as copays, deductibles, and remaining balances. These plans provide first-dollar coverage for treatment and, with our exclusive catastrophic program, up to $7.5 million dollars per injury in the event of a catastrophic injury. This is the highest limit available in the market.

At Gallagher Student Health & Special Risk, we tailor accident coverage programs for our Diocesan clients to ensure the best coverage is provided for the students, athletes, volunteers and other participant groups. By having a comprehensive basic and catastrophic accident program in place, you can have peace of mind that your students are covered for injuries incurred at school, travel to and from school sponsored activities, during athletic competition and practice, as well as any other school-sponsored activities. This strategy also protects your loss fund and the potential out-of-pocket expense.

Our experience and knowledge in this specialized diocesan and parish schools’ market, along with our relationships with the top carriers and claims administrators, allow us to place our diocesan clients with the right carrier and claims administrator for their respective programs. Let us take care of the administration so you can have peace of mind that your students are taken care of.

Charlie Eisenbies (Attending the DFMC Meeting in San Diego) Gallagher’s Sports & Special Risk Account Executive, Gallagher Student Health E: [email protected] | P. 617.769.6458

Charlie Eisenbies


Common Ground — 16 years and thrivingIn July leaders of faith-based captives and programs in insurance and risk management gathered at the new Gallagher Global Headquarters in Chicagoland to share ideas and seek solutions and resources to help them manage the challenges of the insurance marketplace.

2017

Co-Creators• Michael Downs, United Church of Christ

• Peter Persuitti, Gallagher’s Religious Practice

Faith-Tradition Host 2017 | Roman Catholic • Bishops’ Plan Insurance Company (www.bpicmembers.org)

• The National Catholic Risk Retention Group (www.nationalcatholic.org)

• Christian Brothers Risk Pooling Trust (www.cbservices.org)

Standing Topics• Program Sharing

• Risk Management Matrix

• Communicating with our Churches

• Marketplace Intel — Carriers

Further Interest• Security as Ministry

• SML Risk Financing

• Claims Administration

DFMC 2017


Viewpoint

Much like mountain climbers aspiring to reach the summit, religious organizations are striving to achieve peak performance. But with challenges like changing workforce demographics, regulatory complexity and a competitive labor market, the right path might not be clear. Let data and insights from religious organizations that participated in Gallagher’s 2017 Benefits Strategy & Benchmarking Survey help guide your ascent.

GUIDING YOUR ASCENT WITH DATA

AssessAs with any journey, the first step is defining your starting point. Each religious employer starts in a different place, with different tools, experiences and expertise at their disposal. Regardless, benchmarking data can anchor them along the way with insightful analysis of their current programs, policies and incentives, framing their expectations and identifying gaps.

Say attracting and retaining talent is a

top operational priority

50%

Believe they have an effective strategy for promoting employee health and wellbeing

45%

Talent Costs Productivity

Faced healthcare premium increases of 10% or more at their most recent renewal

34%

MapOnce religious employers have a clear assessment of their organization's status, they're better prepared to determine where to go next and what it will take to achieve their goals. This includes thoughtful, integrated planning that connects the dots between compensation and benefits, policies, and program offerings — as well as organizational objectives.

Navigating with DataOverall, religious employers are integrating a broader set of metrics into their benefits decision-making process. The data and resources organizations most commonly use for benefits planning include:

As you work to become a destination employer, how is your organization managing steps like retirement readiness or wellness and productivity?

CURRENT AND PROJECTED FINANCIAL PERFORMANCE

BENCHMARKING INFORMATION STRATEGIC PLAN

WORKFORCE CHARACTERISTICS

SURVEY OF EMPLOYEE PREFERENCES

MULTI-YEAR LABOR COST MODELING

76%

50%

33% 28%20% 0%

ClimbThe most successful religious employers aggressively pursue long-term goals by executing on small, distinct steps. Employers need a reliable way to understand whether or not their methods and program offerings enhance the employee experience or promote further engagement. Data can increasingly help employers prepare, refine and reroute when environment or

Wellness and Productivity

100% evaluate wellness program performance...

0%...but measure the impact on productivity

Retirement Readiness

74%Amongthe

that offer a retirement program...

26%...only measure retirement readiness

Religious employers like you that aspire to compete at the highest level as a destination employer are setting their sights on a more holistic and integrated approach to benefits and compensation management. Let increased data integration, longer-term planning and the strategic use of external advisors help guide you along your path.

To learn more, visit ajg.com/religious or contact your local Gallagher Religious consultant.

© 2017 Gallagher Benefit Services, Inc.www.ajg.com/nbs2017

17GBS25075

This year's top organizational priorities revolved around talent, costs and productivity. How does your organization stack up?

Source: Arthur J. Gallagher & Co.'s 2017 Benefits Strategy & Benchmarking Survey.Data was gathered from 58 U.S. religious employers.

Religious organizations are tasked with walking a tightrope between offering a total rewards package that will attract and retain quality employees while at the same time managing and controlling costs so as to sustain the mission. Using data can help your organization rise to the highest level as a destination employer. Gallagher’s 2017 Benefits Strategy & Benchmarking Survey can help guide your ascent. Please contact your Gallagher representative for more information about using data to reach the summit.


As employees’ continue to seek areas that have a constructive impact on workforce productivity they increasingly are finding that employee’s financial wellness has an impact. Consider that the following financial issues are ever present in your employees’ thoughts and of course vary based on where they are in their work stage.

Financial stress impacts your organization’s overall performance, productivity and business results in a meaningful way.

Organizations seeking to reduce the impact of financial stress on their workforce would be well served to consider a financial wellness program. The key step toward introducing a financial wellness program would be to evaluate your workforce and the role financial stress plays within it

14GBS26747A

REDUCE THE IMPACT OF FINANCIAL STRESS THE LINK BETWEEN FINANCIAL STRESS, HEALTH AND YOUR BOTTOM LINE

Employees reporting at least some level of financial stress. 2

Americans losing sleep over their finances. 3

FINANCIAL STRESS IMPACT ON HEALTH 4

FINANCES — TOP STRESS FACTOR FOR EMPLOYEES

1 American Psychological Association, Stress in America™ 2013 Highlights: Are Teens Adopting Adults’ Stress Habits

2 Financial Finesse Reports, 2014 Research Financial Stress http://www.financialfinesse.com/research-best-practices/2014-financial-stress-research-2/

3 ComPsych Poll: Vast Majority of Employees Losing Sleep Over Financial Worries, ComPsych, October 27, 2008

4 AP-AOL Health Poll: Debt Stress: The Toll Owing Money Takes on the Body

© Gallagher Benefit Services, Inc. | www.ajg.com

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as “Gallagher Benefit Services of California Insurance Services” and in Massachusetts as “Gallagher Benefit Insurance Services.” Securities and Investment Advisory Services may be offered through NFP Advisor Services, LLC, Member FINRA/SIPC. NFP Advisor Services, LLC is not affiliated with Arthur J. Gallagher & Co. or Gallagher Benefit Services, Inc. Neither Arthur J. Gallagher & Co., NFP Advisor Services, LLC or their affiliates provide accounting, legal, or tax advice. GBS/NFP-CD(134823)(exp122015)

KNOW YOUR NUMBERS: Data Drives DecisionsTM –Learn how a workforce evaluation report can provide you with insights that could impact performance, productivity and engagement.

LESSEN THE STRESS: Focus on Financial Health–Consider introducing a financial wellness plan as part of your total rewards strategy for employees.

COMMUNICATE AND EDUCATE: If You Can Reach Them, You Can Teach Them–Maximize your investment in financial wellness by utilizing a multi-channel approach for communicating.

33%

39%

29%

23%

44%

26%

17%

4%

4%

15%

High Blood Pressure

Insomnia/Sleep Trouble

Severe Anxiety

Severe Depression

Migraines/Headaches

People with high levels of financial stress People with low levels of financial stress

FINANCIAL STRESS AND YOUR BOTTOM LINE

Delayed Retirement

Higher Compensation Costs

Higher Healthcare Costs

Higher WC and/or Disability Claims

Increased Absenteeism

Increased Turnover

Lower Productivity

65 !$

WHAT CAN YOU DO?The link between productivity, employee well-being and financial stress makes it a top business concern. Gallagher suggests:

92%

MOST COMMONLY REPORTED SOURCES OF STRESS.1

71%

WORK

59%69%

MONEY ECONOMY

86%

DFMC 2017


Viewpoint

Dana CrowlSenior Vice President — Program ManagerGallagher Charitable International Insurance1301 Gervais St., Suite 400 | Columbia, SC 29201C 864.907.2185 | O 864.239.2426 | F 864.751.5900

[email protected]

“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC. Arthur J. Gallagher & Co. named one of the World’s Most Ethical Companies for 2016. Ethisphere Institute, March 2016.© 2015 Arthur J. Gallagher & Co. All rights reserved.16BSD30442A

Gallagher Charitable

INTERNATIONAL TRAVEL INSURANCE

Benefit Limit CommentsAccidental Death & Dismemberment

$100,000 Reduced to $10,000 for those under age 12 or age 70 and over

Medical Expenses$100 deductible

$10,000 Primary coverage; $2,500 of this limit is available to pay US providers; no pre-existing condition exclusion

Disability Income Benefit(no benefit if under age 12 or 70 and over)

$1,000 / month$500 / month$250 / month

First 100 Months — AccidentMonths 101-200 — Accident50 Months — Sickness (after 3 month waiting period)

Assistance Service Included Available 24/7/365 for assistance with worldwide medical emergencies; provided by Specialty Assist™

Emergency Medical Evacuation $100,000 Coordinated by Specialty Assist™; will bring insured back to USA; no pre-existing condition exclusions

Crisis Management Service Included Available 24/7/365 for assistance with worldwide non-medical emergencies; provided by red24

Security Evacuation $100,000 Coordinated by red24; for evacuation due to natural disasters, civil unrest, crime, kidnap/hostage situations

Family Coordination & Repatriation of Mortal Remains

$25,000 Combined limit for both benefits and includes a sublimit of $2,500 for extra expenses incurred during an approved evacuation

Personal Property $100 deductible

$2,500 “Door to door”, replacement cost coverage; includes checked baggage; higher limits available upon request

General Liability $1,000,000 Worldwide jurisdiction; includes coverage for injury to a volunteer; covers volunteer and sending organization

RATE $3.30 PER DAY/PER PERSON

Gallagher Charitable International Insurance Services (GCIIS) in partnership with underwriters at Lloyd’s of London has developed international products speci� cally designed for those traveling outside their home country. � is plan is designed to provide international coverages needed for worry free travel. Email or call us for more information. Visit our website at www.TravelwithGallagher.com to enroll and pay online.

International Short-Term Travel Coverage

• Trip Cancellation/Interruption

• Financial Default of a Travel Supplier

• Terrorist Incident

• Organized labor strike, natural disaster or bad weather

• Hijacked or medically quarantined

• Summoned to serve on a jury or served with a court order

• Travel Delay (due to Travel Supplier, Lost Travel Documents, Medical Quarantine, Natural Disaster, Emergency Illness)

• Baggage Delay

MAXIMUM BENEFIT PER PARTICIPANT

• Trip Cancellation/Interruption: $10,000

• Travel Delay: $500 ($100 per day)

• Baggage Delay: $100

RATE: $5.20 PER DAY/PER PERSON

TRIP CANCELLATION BENEFITS


DFMC 2017


Viewpoint

Designed specifically for Dioceses

Potential Mounting Risk Exposures

Your diocese deals with the tedious task of insurance renewal every year. How can you gather that data effectively and confidentially?

In order to remain informed and involved in your diocesan risk management activities, you would like to be able to better understand, manage and analyze the various risk exposures. With more organizations having to work with fewer resources and lower budgets, gathering and maintaining this information for insurance placements or re-newals shouldn’t have to be such an overwhelming and time-consuming process. We’ve identified an option for you — RiskPartner RMIS. Just ask Tom Schadle, CFO of the Diocese of Tulsa:

“Information management is so vital to our enterprise operations and decision making; the RMIS platform has allowed us an efficient organizing and access point and thus to secure valuable insights real time on all our parishes, schools and agencies.”

The RiskPartner RMIS software solution allows you and your team to:

• View the aggregate insurance data within your diocese.

• Track detailed insurance and loss data within your diocese — and address any necessary loss control issues in advance of a renewal.

• Keep all key members within your diocese (senior management, operations, IT, human resources and accounting) informed throughout the year.

• Have 24-hours-a-day and 7-days-a-week access to your detailed and collective group’s data.

Let RiskPartner improve your process and provide you with the critical information you require throughout the year.

Marcus HenthornRiskPartner, Director of Sales

P: 630.694.5152 C: 515.441.2555 [email protected]

www.gallagherpost.com

Peter Persuitti Managing Director, Religious Practice

P: 888.285.5106 [email protected]

© 2015 Arthur J. Gallagher & Co. All rights reserved. 15BSD27224A

Exposure Data

Policy Data

Claims Data

Loss Control

Incident Management

RMIS — Risk Management Information System


BPIC Key Facts —2017

BISHOPS’ PLANINSURANCE COMPANY

EPISCOPAL MODERATOR

Most Rev.Thomas John Paprocki, BishopDiocese of Springfield in Illinois

BOARD OF DIRECTORS

Diocese of AustinMary Beth Koenig, Treasurer

Archdiocese of CincinnatiCharlotte Carpenter

Archdiocese of IndianapolisMike Witka

Diocese of Pensacola-Tallahassee John Godlewski

Archdiocese of Portland in OregonPaulette Furness, Esq.

Archdiocese of St. LouisTom Buckley, Esq.

Diocese of Tulsa Thomas Schadle, Chair

Diocese of YoungstownPatrick Kelly, Secretary

Independent Director (Vermont)Marc Landry

CONTACT INFORMATION

PhoneToll-Free: 877-325-BPIC (2742)

[email protected]

Websitewww.bpicmembers.org

Operating TeamEmily Bettisworth

Mary MauckPeter A. Persuitti

BPIC Key Facts - 2017 Bishops’ Plan Insurance Company, founded in 2003.

A national nonprofit organization, governed by a Board of Directors and an Episcopal Moderator

A collaborative company, currently owned by 29 member dioceses and archdioceses in the USA and growing

A reinsurance captive, domiciled in Vermont, offering coverages excess of member retentions across all lines

A flexible base level of coverage of risk excess of members’ retention that is designed to meet each member’s risk management needs that can be modified each year

An insurance policy that is fronted by Lloyd’s of London (Brit Syndicate A Rated Paper) with BPIC taking 40% of the risk, 60% retained by Brit

A company that issues an annual audit report to each of its members

A successful operating entity that has been returning positive financial results that grows members’ equity. An annual statement of each members’ ownership position is provided to each member.

An ecclesial organization that hosts its member bishops, archbishops and cardinals for an annual dinner and discussion each November in Baltimore

A resourceful partner to member dioceses, offering online training resources, white papers and an annual networking meeting funded for members each May

A genuine manifestation of Stewardship in the 21st Century.

DFMC 2017


Viewpoint

The POST www.GallagherPost.com

Do you have a login? How about your team?

The Gallagher PostTo access all the resources.

Home Page of the Post


Actively Managing Risk for Long-Term Sustainability—Looking Beyond Insurance Limits and Premiums

42 | 2017 HUMAN CAPITAL INSIGHTS REPORT

Bill Ziebell

Mike Pesch

Actively Managing Risk for Long-Term Sustainability — Looking Beyond Insurance Limits and PremiumsMost organizations approach their risk in the same way. They select a broker, compare policies, and oftentimes default to buying the lowest priced option. Yet, insurance is about much more than just limits and premiums — it’s about managing the risk that companies face every day. When business is routine, management may be lulled into a sense of security about surrounding dangers. However, when unexpected developments disrupt predictable patterns the perils can seem glaring. Management’s senses go on high alert and risk appears in places that were never before identified as problematic.

Properly anticipating and managing all risk is challenging for any organization no matter what its circumstances are. New companies tend to be vigilant, constantly evaluating and monitoring their risk. In contrast, established businesses may become comfortable with their risk and related decisions, unaware of subtle changes in exposure that occur as their company grows and evolves.

Assessing the significance of specific risksEffective risk management requires a holistic approach with a focus on establishing structure, organization and discipline. It’s also important to ground this approach in a thorough understanding of the specific risks the company faces and their potential impact.

Beyond the traditional property and casualty concerns, it’s important to consider human capital risks. Some of the most significant include a weakened ability to compete due to lost talent, an unsustainable cost structure caused by overpaying key employees to retain them, and the expense of employee claims, injuries and absences when safety programs are missing or lacking.

Looking at all aspects and potential risks from both a benefits planning and an insurance coverage perspective helps determine alignment with overall organizational goals.

Freq

uenc

y of

Occ

urre

nce

HIG

HM

ED

IUM

LOW

LOW MEDIUM HIGH

Business Impact

FOOD AND AGRIBUSINESS RISK MAP

1INSURABLE RISKS — for example, fire or explosion, weather-related risks or vehicle accidents.

2PARTIALLY INSURABLE RISKS — for example, asset management, credit risk or chemical releases.

3UNINSURABLE RISKS — for example, inadequate margin, change in market conditions, fraudulent acts, succession planning, employee wellness and safety, or an aging workforce.

Insurable Risks1

Partially Insurable Risks2

Uninsurable Risks3

Managing Risk

From the 2017 Human Capitol Insight Report(See page 21 of the Report)

DFMC 2017


Viewpoint

Arthur J. Gallagher & Co. | AJG.COM | 43

The versatile and valuable risk surveyCompanies use risk surveys as assessment tools to quickly hone in on the top risks facing their organization — or even their entire industry. Participants are asked to rank a set of potential risks based on their perceived frequency and severity of impact should they occur. One way to effectively study the results is to plot this data on a scatter graph known as a heat map (or risk map) — a depiction of client or industry risk that compares the frequency and business impact of each risk to the others that are shown.This consolidated, simplified view identifies risks along a spectrum from “cold” (low value) to “hot” (high value). Colder risks are more likely to pose a reduced threat while hotter risks are potentially the most damaging. As shown in the “Food & Agribusiness” example, the individual values are categorized by color. Low-frequency/low-impact risks appear in the green quadrant and high-frequency/high-impact risks are shown in the orange quadrant.

The completed risk map provides a quick-reference guide for an informed discussion about the state of the organization’s overall risk management program. In the example, an added feature of the survey’s risk map is the ability to identify risks that are insurable, partially insurable or uninsurable. This helps bring insights to the surface about feasible risk transfer methods, and how to manage risks that can’t be transferred.

Multiple uses and insightsWhen risk survey results are aggregated across multiple organizations, it’s easy to create a risk map that shows data across an industry. Companies can then compare their risk survey results with those of their peers. By providing this additional perspective, the survey helps identify risks that could be overlooked or underestimated, or even risks that have been overestimated. An industry risk map is an excellent cross-check to help ensure that an organization is properly focused on the most critical risks.

A formal risk assessmentmay be a great opportunity tocombine the efforts of benefits

and property/casualty programs.Taking a holistic inventory of risk paves the way for a productive

discussion not only about where these programs overlap, but also

how to coordinate themacross the business.

A formal risk assessment may be a great opportunity to combine the efforts of benefits and property/casualty programs. Taking a holistic inventory of risk paves the way for a productive discussion not only about where these programs overlap, but also how to coordinate them across the business. For instance, a deeper understanding of how the organization’s wellness program can impact employees’ return-to-work times could have significant implications for its worker’s

compensation program and overall risk management program costs. This is why it’s often valuable for several key executives and employees to participate in the risk survey — not only to create a more accurate organizational risk map, but also to talk through the differing responses.

Risk is everywhere, and just because something isn’t expected to happen doesn’t mean it won’t. Completing a risk survey can provide organizations with a clearer picture of all the risks they face and their potential impact on the business, helping guide them to make more confident decisions and better prepare for optimal outcomes.

William F. Ziebell, CEO, Benefits & HR Consulting

Bill is responsible for day-to-day operations and management of

Gallagher’s employee benefits consulting and brokerage business

across the globe.

Mike Pesch, CEO, U.S. Brokerage Services

Mike leads the day-to-day operations of Gallagher’s retail property

& casualty brokerage business throughout the U.S.


EventUs!

No, this is not a Latin word waiting to be “declined” or a masculine adjective waiting to find agreement with a noun—

rather it is Gallagher’s brand for an online TULIP program that has been designed for Dioceses.

Making your facilities available for rentals is a great community service; however, there are additional hazards that have come with theses rentals, including additional liability for someone slipping and falling on your premise and/or causing damage to your property during the event. Your organization’s traditional insurance policy will cover these exposures, but most organizations that rent their facilities are now requiring renters to provide proof of liability insurance prior to an event, thus trying to protect the organization’s insurance policies by transferring the liability for these events to the renter. This is a good practice that will provide a buffer layer of insurance prior to any claims being brought against your Diocese’s insurance policies. At this time, several organizations are relying on either coverage provided by a homeowner’s insurance policy or monoline special event policies. There are a few issues with this practice:

• Homeowners Policies—Providing event coverage through adding an endorsement to a homeowner’s insurance policy is problematic because most homeowners policies don’t have sufficient amount of insurance (i.e., $1m liability limits) and in most cases, the homeowners will not be able to name your organization as an additional insured.

• Special Events Policies—Purchasing a separate Special Events Insurance Policy is a good option, but your organization will need to make sure property damage coverage is included, as well as making sure you name your organization as an additional insured. The main problem here is that most insurance companies have a minimum premium of $300 for special event insurance and this cost could be prohibitive to having the event at your facility.

• Liquor Liability Issues—Most of these policies exclude claims involving liquor, even for a vicarious liability situation (where a catering company is providing the insurance for liquor liability, but the renter/facility arc still dragged in to the lawsuit).

There are two solutions to these problems. One is that you will most likely have several business/nonprofits that already have a liability policy in place and that can extend to include your organization as additional insured, include coverage for property damage and have at least a $1m liability limit. For these entities

insurance shouldn’t be a problem.

However, most likely you will have several fundraisers, weddings, reunions, anniversaries, etc., who don’t have insurance and the best option for this situation is what we call a TULIP (Tenant Users Liability Insurance Policy) policy. Several insurance companies have come out with TULIP policies, but they are usually subject to a high-deposit premium; most deposits run $2,000–$5,000, which can be a cash flow drain on your organization.

Arthur J. Gallagher & Co. has developed a customized TULIP program for Dioceses called “EventUs” where the per-event cost can be as low as $103, the renter can get a quote online; the renter can even pay online with a credit card or check and both the renter and your organization will receive a proof of insurance within a few minutes. EventUs automatically names your organization as an additional insured on the policy. It includes host liquor liability for no charge and it does enable the purchase of standard liquor liability insurance, if needed. The EventUs policy is a separate policy that can be started at anytime. The best part is that there is no cost or deposit to your organization, yet it allows you to provide a low-cost option for insurance to the renters and ensures that the renters have adequate coverage.

For further information, contact Gallagher’s Religious Practice Team member: James Martinez, Centennial, CO — 303.889.2520 [email protected]

https://eventus.ajgrms.com/

